The stock of Super Micro Computer (SMCI) is up 22% after the server maker reported financial results in time to meet a deadline imposed by the U.S. Securities and Exchange Commission (SEC).
Super Micro Computer was at risk of being delisted from the Nasdaq (NDAQ) exchange on which its shares trade if it missed the Feb. 25 deadline to submit its financial results to the SEC. SMCI stock is up sharply on news that the company made the deadline in what can best be described as a relief rally.
BDO, Super Micro Computer’s auditor, wrote in the filing that, “In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024.” Super Micro filed updated and audited financials with the SEC for its Fiscal 2024 financial year that ended last June, and the first two quarters of the company’s current Fiscal 2025.
The filing eliminates any possibility that the server maker could be delisted from the Nasdaq exchange, a situation that had weighed on SMCI stock in recent months.
Financial Reporting Issues
Last year, Super Micro Computer delayed filing its annual report with the SEC, lost its auditor Ernst & Young over governance issues, and was accused of accounting malfeasance by a short seller. Super Micro had until end of day on Feb. 25 to become compliant with the SEC and file audited financial statements.
Super Micro Computer said as part of its regulatory filing that it is hiring additional accounting and audit employees, and upgrading its information technology (IT) systems, to help resolve past financial reporting issues. According to the company’s audited financial results, Super Micro’s sales more than doubled during Fiscal 2024 to $14.99 billion.
SMCI stock has risen 49% so far this year after a brutal selloff last fall.
Is SMCI Stock a Buy?
The stock of Super Micro Computer has a consensus Hold rating among seven Wall Street analysts. That rating is based on three Buy, two Hold, and two Sell recommendations issued in the past three months. The average SMCI price target of $37.17 implies 18.38% downside risk from current levels.
